32. What type of investments are categorized as either current or long-term asse
ID: 2431053 • Letter: 3
Question
32. What type of investments are categorized as either current or long-term assets on the balance sheet, depending on the maturity date? A) Equity investments B) Matured investments C) Trading investments D) Held-to-maturity investments _ ___ are equity securities in which the investor owns between 20% and 50% of the company's voting stock. A) Held-to-maturity investments 7/12/18 BA212 Financial Accounting II Mid-Term Learning Assessment Page 11 of 15 B) Significant interest investments C) Controlling interest investments D) Available-for-sale investments ntExplanation / Answer
Answer 32:
Option D is correct.
Equity investments are long term investments in which the company holds the investment for longer than one year. Therefore, A is incorrect.
Matured investments is loan or investment in which the principal and interest is due to be paid. Therefore, Option B is incorrect.
Trading investments are debt or security in which investor holds less than 20% of the voting stock and plans to sell to them in near future. Therefore, C is incorrect.
Debt securities the investor hold till it matures. It consider the current assets or long term assets on the balance sheet depending on the maturity date. Therefore, Option D is correct.
Answer 33:
Option B is correct.
Debt securities the investor hold till it matures. It consider the current assets or long term assets on the balance sheet depending on the maturity date. Therefore Option A is incorrect.
Significant interest investment is an equity security in which investor owns 20% to 50% of the investee's voting stock. It is reported as the long-term assets on the balance sheet. Therefore, Option B is correct.
Controlling interest investment is an equity security in which investor has more than 50% of investee's voting stock. Therefore, Option C is incorrect.
Available for sale investments is debt or equity security in which investor holds less than 20% of voting stoc and is not a trading investment. Therefore, Option D is incorrect.
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